Labour's 1.5million new homes would boost Britain's economy by £23billion

27 February 2024 , 15:46

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Building new homes would provide a shot in the arm for the struggling economy (Image: Getty Images)

Labour will deliver an up to £23billion boost to the economy if they build 1.5million homes in their first five years in power, according to research.

A study by the campaign group Britain Remade shows it would support hundreds of thousands of jobs, as well as creating extra tax revenue. Keir Starmer has pledged to get Britain building again – starting with one and a half million new homes across the country within five years of a Labour government.

If the houses are built to the top energy efficiency standards where housing costs are the highest this would provide a £22.5billion boost to the economy and hand the Treasury a £9.2billion tax windfall, Britain Remade found.

Increasing the number of homes that are being built will stop prices rising so quickly, freeing up money for people to spend on other goods and services. At the moment, the economy is being held back as expensive housing in the most desirable locations means people are priced out of moving within reach of better jobs. More housebuilding would also increase the amount raised from stamp duty.

It is estimated that building 300,000 new homes a year as Labour has promised would support 132,000 homebuilding jobs and 79,000 supply-chain jobs.

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Sam Richards, campaign director of Britain Remade, said: “Never has it been so difficult for young people to get onto the housing ladder. The last time house prices were this high relative to the average salary, Queen Victoria was on the throne. Building the homes we desperately need will not only mean young people can get on the housing ladder and boost the economy, it will also provide Labour, if they win the next election, with the firepower needed to deliver more of the green prosperity plan.

"The country has been through a horrible couple of years so fiscal credibility is important. But Keir and Rachel Reeves should not lose sight of the huge economic benefits of building the homes we need.”

He added: “Building homes to the highest energy efficiency standards rather than just the average, which sadly is all most builders do, will make a meaningful impact on emissions. Building homes is a win for young people, a win for the economy and a win for the environment.”

John Stevens